In an effort to further boost investor confidence, the government of the UAE is reorganizing the restructuring and insolvency law framework and will establish specialized courts to handle bankruptcy cases.
Legal experts state that a federal law on bankruptcy and financial restructuring was published in the UAE Gazette on October 31 and would take effect on May 1, 2024.
A Court of Appeal judge currently presides over a specialized division of the Courts that is in charge of managing bankruptcy and restructuring cases. The new regulation avoids separate enforcement processes for creditors and protects while streamlining the process.
Without setting a deadline, the court may impose a stay on creditor activities from the moment legal action and execution measures against debtors begin until the restructuring plan is approved. According to Areen Jayousi, a partner of Horizons & Co., “exceptions are made for employment and family law matters to protect the rights of employees and spouses.”
He emphasized that one noteworthy aspect of the New Law in the UAE is its attention on preventing any harm to the bankruptcy estate during restructuring.
